Ontario urges end to U.S. softwood lumber duties as Washington signals possible relief
Thunder Bay – POLITICS – Ontario is welcoming a preliminary signal from the U.S. Department of Commerce that softwood lumber duties could ease later in 2026, but Queen’s Park says any remaining charge on Canadian wood is still unjustified.
A statement issued Friday by Associate Minister Kevin Holland, Natural Resources Minister Mike Harris and Economic Development Minister Vic Fedeli matters in Thunder Bay and Northwestern Ontario because forestry and forest-products jobs remain concentrated in northern Ontario, where trade friction can hit mills, transportation links and investment plans.
“Ontario’s forest sector has a global reputation as a leader in the G7 in the production of high-quality wood and wood products. People and businesses in Canada and the United States alike rely on Ontario-made softwood lumber to build homes and critical community infrastructure. While this preliminary indication suggests some relief for softwood lumber producers later this year, Ontario remains firm that duties are unwarranted and not supported by the evidence. We continue to call for the full removal of all duties that raise costs for both American and Canadian families. These ongoing duties and tariffs reduce productivity, disrupt supply chains, drive up the cost of construction and make housing less affordable. Trade and cooperation make our two countries stronger, safer and more prosperous. We urge the United States to work with Canada on a fair and long-term resolution in support of workers, families and businesses on both sides of the border.”
Ontario says softer rates are not enough
In their statement, the ministers said the preliminary U.S. indication offers some potential relief from a current duty burden of about 35 per cent, but they again called for the full removal of duties and tariffs. Ottawa’s own tracking shows the current “all others” combined anti-dumping and countervailing duty rate took effect in 2025 at 35.19 per cent, though company-specific rates vary.
A dispute that has outlasted governments on both sides of the border
The Canada-U.S. softwood lumber fight is not new. Export Development Canada traces the dispute to 1982, when U.S. producers first petitioned for countervailing duties, focusing on provincial stumpage systems in British Columbia, Alberta, Ontario and Quebec. Global Affairs Canada says the 2006 Softwood Lumber Agreement ended the 2001-2006 round, returned more than US$5 billion in duty deposits to Canadian companies and brought a measure of stability until the deal expired on Oct. 12, 2015. After a one-year standstill, new U.S. investigations led to duties from early 2017 to the present.
Why Washington keeps coming back to lumber
At the heart of the dispute is the longstanding U.S. claim that Canadian lumber benefits from unfair subsidies or dumping. Canada rejects that argument and has repeatedly challenged U.S. measures through WTO, NAFTA and now CUSMA-era processes. Global Affairs Canada says the U.S. market still depends on imported lumber and that the 2006 agreement provided a more stable framework before it expired.
What the duties and tariffs mean for the cost of a U.S. home
There is no single accepted number for how much lumber duties add to the price of a new American home, but the cost pressure is real. The U.S. National Association of Home Builders says builders were budgeting an added $7,500 to $10,000 on the average new single-family house from tariffs on imported construction materials. The same group says the United States imports roughly one-third of the lumber it consumes, Canada supplies nearly 85 per cent of those imports, and the combined trade burden on Canadian lumber reached about 45 per cent after the extra 10 per cent timber and lumber tariff imposed in late 2025.
A rough full-pass-through estimate using NAHB’s own cost data shows why Ontario is pressing the point. NAHB puts the average 2024 construction cost of a new U.S. single-family home at $428,215, with framing accounting for 18.4 per cent of that total.
Using an estimate that Canadian softwood supplies about one-quarter of U.S. consumption and applying the current 35.19 per cent duty rate, the implied added cost on the Canadian lumber portion alone works out to roughly $6,900 per home if the full duty is passed through. In practice, the number can be lower or higher depending on how much importers, yards and builders absorb, and how prices move across the wider lumber market.
A separate 2025 industry analysis estimated the jump from 14.5 per cent to 34.5 per cent duties could add up to $6,000 to single-family construction costs.
Why the issue matters in Thunder Bay and Northwestern Ontario
For Northwestern Ontario, this is more than a trade-law fight in Washington. Ontario’s forestry and forest-products sector employed an estimated 44,800 people in 2024 and contributed $5.5 billion to provincial GDP, with activity heavily concentrated in northern Ontario.
That means duty changes can affect confidence around harvesting, milling, trucking, rail shipments and value-added wood manufacturing across the region, including the broader Thunder Bay supply chain.
Ontario is also leaning on support programs at home. The 2026 budget says the province’s Forest Sector Investment and Innovation Program is backing projects meant to improve productivity, expand markets and strengthen regional supply chains, with more than $72 million set to leverage $425 million in investment.
That may help some firms ride out the dispute, but it does not solve the political problem at the centre of this file: the United States remains a critical market for Canadian softwood, and every new round of duties adds uncertainty for workers and communities that depend on forestry.
